# Looking to open a cigar shop



## Biggersmoke

i am currently looking in the market of owning a cigar shop. i am currently a nurse and plan on staying one so i have saved up plenty of money and make enough to help support the business in rough times. i realize that running such a store is a more than full time job, i currently support my brothers so they will be operating the shop for me (both over 18 ) when i am working. i live in a town of about 850,000. lots of headshops but no real cigar stores. i have not been able to find certain info so i will ask them here

1. Would i get in touch with like the CAO, Drew Estate, and such to get the inventory? or would i go for like Thompson cigar or such to get my inventory?

2. What licenses would i need to start such a business? (for selling cigarettes, cigars, and maybe magazines and newspapers)

3. How much would i expect to pay for inventory for a medium sized store? (probably around 40 different brands)

looking forward to hearing responses
thanks,
Dan


----------



## ignite223

Good luck to you! I have always thought that opening a shop would be a fun idea, but I might smoke too much inventory.


----------



## socalocmatt

I don't own a cigar shop but run a company and have friends that have an alcohol import company. So, take this for what it is cuz I can be 100% wrong:

*1. Would i get in touch with like the CAO, Drew Estate, and such to get the inventory? or would i go for like Thompson cigar or such to get my inventory?*

You would probably need to go through a wholesale cigar distributor. I did a quick google for it and got some interesting hits.

*2. What licenses would i need to start such a business? (for selling cigarettes, cigars, and maybe magazines and newspapers)*

Check with your city, county, state. Best thing to do is hit up your City Hall. Also might want to google something like AZ tobacco sales permit.

*3. How much would i expect to pay for inventory for a medium sized store? (probably around 40 different brands)*

This would be something you would work out with the distribution company; as well as any possible Net terms (2% 10 Net 30).


----------



## krisko

Man, what an awesome and risky overtaking. The ONLY way I would open a cigar store is if I required no loans and could stand to lose 250K without affecting my lifestyle. Owning a cigar store is truly a labor of love because there is little profit to be gained but a huge amount of risk. To me, the 3 biggest concerns are 1) anti-business climate (taxes/regulation, especially 'sin' taxes), 2) online competition (hard to justify a $11 cigar when it can be bought for $4 from joecigar), 3) shakey economy (if you don't have a job, how can you justify a hobby like cigars?). 

I think the biggest profit margin is in higher end Padron and Fuente cigars. You need to figure out if the locals can afford a $15 cigar and then be lucky enough to get them. As a shop owner, I would never buy a cigar for $12 and then sell it for $20 (opus X for example) but that's what you might have to do to stock them. Padron is cash up front with a minimum order, so you might put $10,000 out there and take 6 months to recoup your cash. Not sure about Fuente's terms, but it takes years and years to establish a relationship where you're getting the Anejos and OpusX, Hemingways, etc.

Probably not the pep talk you were hoping for. I just wanted to make sure you realize that opening a cigar shop isn't an 'investment', rather it's a hobby.


----------



## primetime76

I think that the way to go would be to open a private club, sell sticks, alcohol, food and charge a membership fee. Also allow people to bring in their own cigars but have like a $5 "lighting" charge for them to smoke their product at your club. I would love to do something like this in my town...wouldn't be so much fun!


----------



## Hatattack

Biggersmoke said:


> i am currently looking in the market of owning a cigar shop. i am currently a nurse and plan on staying one so i have saved up plenty of money and make enough to help support the business in rough times. i realize that running such a store is a more than full time job, i currently support my brothers so they will be operating the shop for me (both over 18 ) when i am working. i live in a town of about 850,000. lots of headshops but no real cigar stores. i have not been able to find certain info so i will ask them here
> 
> 1. Would i get in touch with like the CAO, Drew Estate, and such to get the inventory? or would i go for like Thompson cigar or such to get my inventory?
> 
> 2. What licenses would i need to start such a business? (for selling cigarettes, cigars, and maybe magazines and newspapers)
> 
> 3. How much would i expect to pay for inventory for a medium sized store? (probably around 40 different brands)
> 
> looking forward to hearing responses
> thanks,
> Dan


Dan,

You are taking on alot if you do not have any retail expirence. Not saying you can't do it, Sam Walton a farmer built Wal Mart so don't get down. But be realistic. Have you ever worked in retail? Have you worked in the cigar industry? Have you consulted a zoning lawyer (oh yes, there will be a fight from the local do gooders)? Have you started building relationships with the different vendors and families? Employees need to be very talented. If I know more about cigars than a B&M employee I won't shop there, also have to be very friendly, if they aren't you won't have regulars like me who buy a few hundred dollars a week in cigars. It's all customer service and presentation in retail. If your shop looks like flea market than expect that customer, if its polished, uniformed and inviting expect big spenders. My wife shops at Target and Publix over Wal Mart because of this even though its more expensive.

Online is hammering all retail. So if you price yourself high, you will close. Its a war, so you have to give the best expirence possible otherwise Joe Shopper will buy offline. You can command a higher price (like a dollar more) if your shop gives the expirence to match. Some people are complete broke dicks and will buy offline to save $0.43, don't worry about them they are the worst customers and not worth the effort. They will never be loyal and will never pay off for going out of your way for to make happy.

Figure a small shop will be around $200,000 atleast to open, I am talking a small shop with a half way decent humidor. If you want to build a kick ass shop figure around $1,500,000 or so. Not only do you have to buy invetory, you have to build a humidor, add vents, buys chairs/tables, permits and retail items (lighters, humidors etc....).

You need to figure out what licenses you need from your local gov. In Florida its pretty cheap, some places its several thousand dollars. If your by a school, church or anything similar forget getting permits.

For getting invetory you need to open a few different accounts with wholesalers and vendors. Some cigar companies sell from the factory floor, others through wholesalers. Drew Estates, Padron and Aston are great companies to start with, they will be very helpful of a new owner. Other companies not so much. You can't open these accounts til you have permits though.

Good luck and feel free to contact me if you need any more help.


----------



## Dr BootyGrabber

I'll be your assistant manager, you can pay me in cigars :smoke:


----------



## Dread

Whatever you do do not get your inventory from an online retailer, youre just asking to go out of business if you do that. Go direct with manufacturers that sell that way otherwise find a distributor for the other brands youre interested in carrying.


----------



## Matt1951

75% of your cigar sales will be from Altadis USA and General Cigar. So get in touch with them. Cigarettes and lottery tickets probably provide most the profits. Buying an existing shop might make more sense, as there is a track record. Big profit makers will be crap like Backwoods, Avino, and Dutch Masters, so you have to carry what the market wants, not what you like to smoke. 
I see value buyers buying bundles of Garcia Vega and Perdomo Fresco at the B&M, so not all value buyers buy on line. 
Visit cigar stores in the Valley, and see if any of the owners are willing to talk to you about opening a shop. They might save you a lot of pain.


----------



## Dread

Matt1951 said:


> *75% of your cigar sales will be from Altadis USA and General Cigar. So get in touch with them*. Cigarettes and lottery tickets probably provide most the profits. Buying an existing shop might make more sense, as there is a track record. Big profit makers will be crap like Backwoods, Avino, and Dutch Masters, so you have to carry what the market wants, not what you like to smoke.
> I see value buyers buying bundles of Garcia Vega and Perdomo Fresco at the B&M, so not all value buyers buy on line.
> Visit cigar stores in the Valley, and see if any of the owners are willing to talk to you about opening a shop. They might save you a lot of pain.


Maybe 10 years ago, but not anymore. Shops have to be evolving with the industry and boutique brands are taking more and more of the B&M market share every year. Boutqiue brands will also support the shop owner since its a mutual benefit relationship whereas Altadis and General dont really do much of anything for the little guys since in their eyes the benefit is minimal.


----------



## Batista30

Dread said:


> Maybe 10 years ago, but not anymore. Shops have to be evolving with the industry and boutique brands are taking more and more of the B&M market share every year. Boutqiue brands will also support the shop owner since its a mutual benefit relationship whereas Altadis and General dont really do much of anything for the little guys since in their eyes the benefit is minimal.


I've spoken with various shop owners the past week, and depending on the demographics, Altadis and General Cigar do control most of the business. There is this one owner who has two shops on both sides of the city and one shop has boutiques dominating sales and the other shop sells macanudos and romeos all day long. So, he makes sure his inventory matches the clientele preferences. (FYI, younger crowd are buying the boutiques and the older generation the romeos, etc)

Bottom line? check out the demographics around the store and cater to their needs. I like Viaje/Tats/Illusiones, but it doesn't mean everyone else will.


----------



## Dread

General and Altadis definetly are the 2 biggest companies right now, but theres no way Fuente/Newman, Padron, Oliva, Patel, Alec Bradley, Perdomo, Drew Estate, DPG, etc only make up 25% of the industry.


----------



## Suzza

I work at a cigar shop so I can probably help.

1. Become an IPCPR member. You will get a book that has the phone numbers of every cigar maker and wholesaler. Then you can set up accounts with them and get cigars at wholesale prices. But when you set up an account you will most likely need to make a first purchase of around $5,000 to $10,000 or more depending on the cigar maker. So it is often good to go through a wholesaler that sells all the different brands so you don't have to get too much of one single brand but rather whatever single boxes and blends you want. And these multi-brand wholesalers generally sell around the same price per box as the brands themselves.

2. You need a tobacco sales license. 

3. First off 40 brands is A LOT. Unless you have one or 2 boxes of each. But lets say you started off with 200 boxes which is a good amount. At wholesale prices you'll spend on average $50 to $100 per box for most cigars. So lets say at $75 dollars a box your 200 box purchase would only cost $15,000. Add a bit to that for rare and expensive cigars and you'll probably start at $17,500. Now this is the cost if you use a wholesaler that sells multiple brands (which is often the best way to go). But if you get accounts with singles brands also (which is only really necessary if you want rare stuff like tats, LPs, and Opuses) you'll probably spend $30,000 to start. And if you get an account with every cigar maker you want (pointless) you'll go well over $100,000 easily.

Hope this helps and good luck!


----------



## Herf N Turf

Good post, Chris.

I'd add, buy a copy of Cigars for Dummies and memorize it. Make your brothers get a copy of Cigars for Dummies and memorize it. Go to Tobacconist University's website and memorize every word.

Get an attorney and an accountant.

Do a business plan.

Read every piece of demographic information for the Tempe/Mesa/Glendale area.

Send your bothers and yourself to a Retail Management Seminar. Friedman is a good one.

Find a location with good foot traffic and dining venues. Preferably a sports bar that allows smoking.

Know your stuff. Know your customer and treat them like kin.


----------



## ZeeKodadi

I don’t know much about a cigar business but I do own a business one word of advice would be to have allot on ends to advertise not just locally but also on the net and maybe even see on the net. 

Make sure you have something catchy name, logo, and phrase 
Make sure you make the outside and inside look constable not intimidating get a woman as a sells person (sex sales) 

I can go on and on but those would be the basics


----------



## Johnny Rock

Tinder Box has a good website regarding franchise opportunities:

Tinder Box International: Franchise Opportunities

Not saying you want a Tinder Box Franchise, but they have lots of information about what it takes to start from scratch.


----------



## krisko

ZeeKodadi said:


> get a woman as a sells person (sex sales)


That didn't work around me. A shop had a hot girl that knew nothing about cigars but she would light it for you and expect a tip for getting her spit all over your cigar. Didn't work for me and others I guess....shop closed after a couple of years.


----------



## dyieldin

_The valley here is a very tough market now, lots of shops/lounges and all have similar price points. I would visit some of the shops like Big Sticks(Bob), Tinderbox in Auatukee(Jeff), Scottsdale Cigar Club(Brad Berko), Cigar King(Josh).

This would also give you some insight as to what other are doing, how busy they are or are not.

You may have success with a smaller, local, Cheers type place with a small humi, lounge, pool table, internet access, free beer on Fridays, half price on **** and hookers for Saturdays. Open one like this near me and I would be there 2 days of the week. Basically the kind of place you like to hang out and do not care if you make a profit but have fun with it, cover the bills.
_


----------



## JI603

+1 .. I was just going to say that if you're in metro phoenix, the competition would be stiff. Plenty of cigar shops in every area of the valley.

Having said that, if Dave's hypothetical club opened up, I would be there for the free beer nights, plus 3 extra nights a week....


----------



## dyieldin

JI603 said:


> +1 .. I was just going to say that if you're in metro phoenix, the competition would be stiff. Plenty of cigar shops in every area of the valley.
> 
> Having said that, if Dave's hypothetical club opened up, I would be there for the free beer nights, plus 3 extra nights a week....


Well, see there Dan. you already have some customers chopping at the bit for some fun and good smokes.


----------



## bent-1

If it were me, I'd firstly work for a cigar shop, getting involved in buying & see what it's really like to run one. Lots of risk from what a good friend, who owns one, told me. Also, I'd consider a partner as employees don't have a vested interest in the business.


----------



## CALIFORNIA KID

I would be most worried about Taxes. I don't know Arizona tobacco tax law but i know here in California its a huge 33.33% to me this is what I would be most concerned about. The next biggest thing I would be worried about is start up cost. Along with rent and inventory you have, cost of licensing, you need shelves and a humidor. A register and a computer along with a book keeping system.


----------



## Matt1951

It is easy to do some market research. I buy cigars at three different B&Ms. I can smoke a cigar at each, and see the cash register. I can see what people are buying. You can also see the prices they are charging, by walking around. Notice which cigar boxes are being rapidly depleted, and which ones never sell. You can also count the number of customers, and estimate sales.


----------



## Bunker

bent-1 said:


> If it were me, I'd firstly work for a cigar shop, getting involved in buying & see what it's really like to run one. Lots of risk from what a good friend, who owns one, told me. Also, I'd consider a partner as employees don't have a vested interest in the business.


That was my first thought.

Either get a part-time job at a decent shop or find a shop that would let you work for free in exchange for some coaching on what you need to know to get started.

Might be good idea to see if your future employee/bothers to learn the ropes somewhere else first too.


----------



## canadianbeaver

Recently I had the pleasure of designing the logo for a start-up cigar shop in Kentucky. The owners had some great ideas and maybe I can share some with you.

First off, the shop takes its name and idea based on the region and nearby river, so, the graphics and theme is instantly historic. It fits in and is a go to destination.

Second, the owner is known in the area as a cigar guy who loves smoking around bars and lounges. So it is a logical step that folks will come to him to ask what cigar they should smoke etc.

Next, he has partners, silent, who help him with the $$ so he does not carry the burden of the money all himself, and when he has an event or whatever, they will call all their buddies to attend and an instant network.

Last, there is a definite plan and max he is willing to pay for anything. And the work I did for him was in trade. We were both thrilled. I hope to post the work I did for him soon, but for now it is confidential.

Best of luck and I hope you do get to open your shop!!!

CB


----------



## MrMayorga

I've been toying with the same idea for when I retire in a few years. I think that after retirement I will work for some local shop for a year or two, to learn the in's and out's of the biz. Another thing I may try to do is to talk the owner of the shop to maybe expanding into another local. That should help defray the start-up costs and cut down on some of the risk factors. If that don't work I may try lining up a few investors (I already have one guy that I know I can con into investing with me). I know they will probably be more of a headache, but it may still be worth it. Another thing I may look into, is turning the shop into an ESOP (Employee Stock Ownership Program). That will save on having to pay Federal taxes.

There are a couple of fellow Puff.com'ers near me that I could get to work part time for a knowledgeable staff. The cash, I should have, and the local is a small town near me with no other shops for miles. That small town also houses an expensive college, so I should be able to wrestle some of those student's money from their rich parents. :rotfl: Time will tell!


----------



## d32

I think I would start with opening a private club. you can probably side step all of the licenses and other bs. get the building and rent squared away with member dues, build out the lounge. maybe make a little on the side with private sales to members. if you had enough people together you can draw on their experience and have some help if you wanted to take it to the next level of commercial sales. 

seems like a safe way to go and is much heavier on the fun factor. I am thinking of opening up a private club here actually but not really teh right area for it here. have to goto erie or buffalo to really pull it off.


----------



## Biggersmoke

canadianbeaver said:


> Recently I had the pleasure of designing the logo for a start-up cigar shop in Kentucky. The owners had some great ideas and maybe I can share some with you.
> 
> First off, the shop takes its name and idea based on the region and nearby river, so, the graphics and theme is instantly historic. It fits in and is a go to destination.
> 
> Second, the owner is known in the area as a cigar guy who loves smoking around bars and lounges. So it is a logical step that folks will come to him to ask what cigar they should smoke etc.
> 
> Next, he has partners, silent, who help him with the $$ so he does not carry the burden of the money all himself, and when he has an event or whatever, they will call all their buddies to attend and an instant network.
> 
> Last, there is a definite plan and max he is willing to pay for anything. And the work I did for him was in trade. We were both thrilled. I hope to post the work I did for him soon, but for now it is confidential.
> 
> Best of luck and I hope you do get to open your shop!!!
> 
> CB


 thank you for the info and offer of service. i will get in touch with you in a few months when i start organizing for my shop


----------



## canadianbeaver

d32 said:


> I think I would start with opening a private club. you can probably side step all of the licenses and other bs. get the building and rent squared away with member dues, build out the lounge. maybe make a little on the side with private sales to members. if you had enough people together you can draw on their experience and have some help if you wanted to take it to the next level of commercial sales.
> 
> seems like a safe way to go and is much heavier on the fun factor. I am thinking of opening up a private club here actually but not really teh right area for it here. have to goto erie or buffalo to really pull it off.


What an amazing idea!!!!!!


----------



## Keithcanuck

socalocmatt said:


> I don't own a cigar shop but run a company and have friends that have an alcohol import company. So, take this for what it is cuz I can be 100% wrong:
> 
> *1. Would i get in touch with like the CAO, Drew Estate, and such to get the inventory? or would i go for like Thompson cigar or such to get my inventory?*
> 
> You would probably need to go through a wholesale cigar distributor. I did a quick google for it and got some interesting hits.
> 
> *2. What licenses would i need to start such a business? (for selling cigarettes, cigars, and maybe magazines and newspapers)*
> 
> Check with your city, county, state. Best thing to do is hit up your City Hall. Also might want to google something like AZ tobacco sales permit.
> 
> *3. How much would i expect to pay for inventory for a medium sized store? (probably around 40 different brands)*
> 
> This would be something you would work out with the distribution company; as well as any possible Net terms (2% 10 Net 30).


Depending on your goals, we are opening a cigars shop in Ontario. With the humidors (expensive but mandatory) and leaseholds coming in at around $75,000 and our inventory of cigars at $250,000 it's an expensive venture. Real estate is a huge cost and location is paramount.


----------



## therealgoldie

Biggersmoke said:


> i am currently looking in the market of owning a cigar shop. i am currently a nurse and plan on staying one so i have saved up plenty of money and make enough to help support the business in rough times. i realize that running such a store is a more than full time job, i currently support my brothers so they will be operating the shop for me (both over 18 ) when i am working. i live in a town of about 850,000. lots of headshops but no real cigar stores. i have not been able to find certain info so i will ask them here
> 
> 1. Would i get in touch with like the CAO, Drew Estate, and such to get the inventory? or would i go for like Thompson cigar or such to get my inventory?
> 
> 2. What licenses would i need to start such a business? (for selling cigarettes, cigars, and maybe magazines and newspapers)
> 
> 3. How much would i expect to pay for inventory for a medium sized store? (probably around 40 different brands)
> 
> looking forward to hearing responses
> thanks,
> Dan


I'm a consultant and buyer for a lounge in Georgia and I also work in a lounge in another state. I too wish to open my own cigar lounge one day.

Here is what I can tell you.

You need a tobacco license. That's the only way you can (1) legally sell cigars and (2) get wholesale prices for better margin.

Whoever it was that told you that Padron has good margins clearly doesn't know diddly squat about purchasing cigars wholesale. Padron is a high end cigar and has some of the worst margins for resale. But you HAVE to stock them. The way you make up the margin loss with them is by getting key-stoned margins on other brands like maybe Rocky Patel, Camacho, CAO, etc.

You cant make in long term in the cigar business if you ONLY sell cigars. Between margins of only 30%- 40%, you NEED other high margin products like cigar accessories. If could become a Cigar Bar (sell cigars and alcohol) instead just a Cigar Lounge....that would tremendously help your profit.

A well trained, friendly staff who knows how to SELL CIGARS and ACCESSORIES instead of just clerking sales is IMPERATIVE. They have to be trained to upsell. When Im at work, NO CUSTOMER leaves the humidor with only the cigars that they went in for. I always upsell.

You also HAVE to sell memberships and lockers. Its almost like free profit. only 20% - 40% goes maintenance, SWAG, etc. the rest is all profit.

Hopefully this helps.


----------



## tlmetcalf2

*Looking to start my own cigar company*

I live in Calumet City, IL which is not that far from Chicago it is a suburbs on the outside of the city. I know a lot of people that smoke cigars in the city and the organizations that I am apart of. I want to have my own business. The product will be a little more marketable if it was sold by a woman. Can someone give me a direct connect to someone, so I can start my own brand of cigars?


----------

